Author Archives: Stefan Oesterhelt

Federal Council proposal of 3 April 2020 to strengthen the Swiss capital market

On 3 April 2020, the Swiss Federal Council opened the consultation procedure for the new proposal to reform the Swiss withholding tax system and the proposal to abolish the transfer stamp duty on trading in certain securities. The consultation period ended on 10 July 2020. The present article provides for an overview over these proposals.

By Stefan Oesterhelt (Reference: CapLaw-2020-41)

Swiss Debt Capital Markets: More Flexibility under New Swiss Withholding Tax Rules

A bond issued by a foreign resident issuer which is guaranteed by its Swiss resident parent company may be reclassified in a domestic issuance subject to 35 withholding tax if the proceeds raised under such bond are used in Switzerland. Under the rules which entered into force on 1 February 2017, it was possible to use the proceeds in Switzerland up to an amount equal to the equity of the foreign issuer. New rules which entered into force on 5 February 2019 added further flexibility with respect to the permissible use of proceeds in Switzerland.

By Stefan Oesterhelt (Reference: CapLaw-2019-44)

Swiss Capital Markets: New Rules regarding Swiss Withholding Tax

A bond issued by a foreign resident issuer but guaranteed by its Swiss resident parent company is reclassified as a domestic issuance and subject to 35 percent withholding tax if the proceeds raised under such bond are used in Switzerland. According to new rules which entered into force on 1 April 2017, it is possible to use the proceeds in Switzerland up to an amount equal to the equity of the foreign issuer and to still avoid a reclassification.

By Stefan Oesterhelt (Reference: CapLaw-2018-01)

Withholding Tax on Interest to be Replaced by Paying Agent Tax System

The Swiss Federal Council issued a proposal on 17 December 2014 to replace the current withholding tax on interest payments by a new paying agent tax system. The new system would be applicable to both domestic and foreign issued bonds and debentures. A Swiss paying agent would have to withhold the Swiss withholding tax, if  the payment would be made to a domestic individual. Payments to domestic entities as well as payments to foreign persons would be out of scope of the Swiss withholding  tax system.

By Stefan Oesterhelt (Reference: CapLaw-2015-5)